Increase your chance of obtaining a loan

Do you have a project ? Buying a home, a car, financing your education, starting a business. To carry out this project, you thought about three ways : winning the lottery, robbing a bank or obtaining a loan from the latter. The first option seems quite hazardous, the second a little risky and the third, after appropriate consideration, seems more realistic. But, in a practical manner, how to convince your banker and to better your odds at obtaining this loan?

These are methods to be applied and some arguments to reach your goal.

Plan in advance!

Going to your appointment without being prepared would be like losing the game before even playing it. You’ll have to think of a few main points :

  • The nature of the project : Buying or renovating a house, buying a car, helping fund your study, starting a business…

  • The financing needed : it’s important to know the exact amount you need and potential additional expenses (for example, the cost of changing the vehicle ownership certificate, a possible check of the car…)

  • The term of the loan : Most of bank recommend maximum 5 years for a car loan, 3 to 4 years maximum for studies, 30 years maximum for mortgages…

  • The monthly repayments : allow flexibility in order to avoid penalties and late payment. As well, think about the future, you might have any new project requiring an additional loan.

  • Your potential contribution : even if it’s a small amount, it can positively influence  the bank’s decision because it shows a serious banking habits.

 

Save time!

Bring all the necessary information, which will facilitate timely conclusions :

  • Work contracts of all borrowers : it shows the type of contract (permanent or not), seniority in the firm…

  • The three last pay slips of all borrowers : without them, impossible for the banker to calculate accurately your repayment capacities.

  • Outstanding loans in different organisms

  • The three last bank statements

  • The different estimations

  • The last income tax form of all borrowers and TFSA

Highlight your assets!

Perhaps, you are not the richest client of your bank but you might be one of the most loyal. As well, you  also may have been using other pay banking services (credit card, saving accounts, insurance products…). Highlight your « customer value » during the appointment. Always keep in mind that a bank is a commercial enterprise that’s trying to increase its client base and not to lose it.

All your saving accounts can be useful. That includes any TFSA you have opened in the past.

Capitalize on competition!

Compare, compare, compare! Do not hesitate to take appointments in different banks and ask for an accurate simulation of a loan. This step can itself prove decisive in achieving a lower interest rate that weighs heavily on the global loan cost. In fact, it is not uncommon to obtain a low-interest loan  only bringing up a competing bid. In short, Use formal written arguments to better negotiate.

Incidentally, one piece of advice : do not only focus on the interest rate. Also, be sure to check the application fee, associated costs, and death and disability insurance cost to include in monthly repayments.

And don’t forget!

Don’t neglect your appearance : It is unfortunate, but in this context « clothes make the man »

Take your time : « A little impatience can ruin a major project » Confucius.

Read before signing : This point seems obvious but a loan contract is quite complex. So, even if most of contrats include the provision on right of withdrawal (7 to 14 days), you should satisfy yourself before you commit to invest.

Be wary of ads that are too attractive : today, it is pretty easy to obtain a loan in different organisms, including by telephone. A serious bank will always ask you the documents listed above to calculate a detailed financing plan and will inform you on the different costs.

Declutter Your Finances

Organising finances can be tedious. Here are some tips to help you get straight:

  1. De-clutter paperwork. You may need to retain some statements and documents to help you complete a tax return, but, throw out what you don’t need, making sure you shred any sensitive documents first, of course.
  2. Keep an accurate record of any savings accounts and/or investments and pensions you have, including contact details and account numbers. Know where your passbooks are kept, if you have them.
  3. Keep your cheque book, if you have one, and debit and credit cards safe. NEVER disclose PIN numbers to anyone. Try not to keep all these cards in the same place.
  4. Keep an accurate record of transactions made, including cash withdrawn, from your bank account. This will help to prevent overspending.
  5. Always review your bank statement for unusual transactions and reconcile this to your record of transactions. You should always be able to identify:
    • Items on the statement and in the transaction record
    • Items on the statement not in the transactions record (have you forgotten to list these down?, or are these an indication of transactions you do not recognise?)
    • Items in the transactions record not on the statement, these are likely to be more recent transactions after the bank statement date
  6. If you can, pay bills such as utility bills by direct debit. Some utility companies offer direct debit discounts and by paying monthly you may be able to avoid a large bill to be paid after a cold winter!

    • Get into the habit of allocating funds for your regular monthly expenses (such as bills, rent, food etc) when you get paid. This way, you’ll be able to identify your disposable income more accurately. If it makes it easier, transfer this money to a separate account or accounts.
    • Always prioritise your mortgage/rent and bills before other discretionary spend.
    • Try to save a little each month so you have something to fall back on. In today’s challenging financial environment this may not be easy as it often takes much effort just to make ends meet, but even small amounts can add up. When times are good (overtime, bonuses) put these aside if you can for leaner times. Saving loose change or pound coins can soon mount up.
    • If you have credit, know when these are due to be paid off, and how many more repayments are due. For unsecured loans made since 2011, the law permits “partial early repayments” as well as early settlement in full. This means that, if you can afford to pay even a small lump sum towards your loan, you may be able to reduce the term (or reduce the remaining repayments and keep the loan term the same).
    • Try not to “fritter”, be able to account for where you have spent money. It is not wrong to spend money on hobbies or on things you enjoy doing, but be accountable.
    • If you do not have one of your own, use budget planners and calculators that are available on websites, these can help you to identify some of the things you may spend money on without “realising”, eg magazine subscriptions, hairdressing, pet insurance, regular subscriptions for gym, glasses, contact lenses etc.
    • Words from the writer: Emily used Uncle Buck when searching for a quick payday loan to help with her finances, payday loans really help when you need a bill paying quickly.

Impaired Credit Isn’t Limiting Senior Citizens

Baby Boomers make up too much of the population to ignore. Often, the national spotlight turns to their healthcare problems, potential political influence, and – most importantly – their financial issues. The latter is especially true in regard to housing, where the most recent reverse mortgage scandals hearken back to the days of the subprime lending crisis.

The Boomer generation is facing retirement; some of its constituents have already hit that age. Whether they are financially capable of it or not, most of them are retiring anyway because – as anyone who’s lived a fruitful life can attest – they feel they deserve it. But some seniors didn’t properly prepare for retirement and tried to take advantage of refinancing their homes with easy credit to afford that dream vacation or long-awaited cruise. Now that the financial debris of the housing collapse has settled, they’re trying to get out of adjustable rate mortgages or facing staggering amounts of debt. And that’s if they didn’t lose their homes to foreclosure altogether.

Despite losing a home to foreclosure or taking big hits to their FICO scores, there are still plenty of options available to seniors who are looking for a new home at retirement age. If there’s one thing Baby Boomers have proven, it’s their capacity for resourcefulness and their ability to overcome hardships as they continually re-shape each passing decade and getting financed for a home loan late in life is no exception.

Federal Housing Administration loans, or FHA loans, offer plenty of options for first-time buyers and individuals with subpar credit history. These loans are beneficial to lenders because they insure against default for borrowers who are paying less than 20% down. Some FHA loans require as little as 3% down, perfect for seniors who may want the extra cash they have saved away to go toward a well-deserved tropical vacation.

FHA loans are also attractive because they can cover closing costs and other fees such as mortgage insurance, leaving no out-of-pocket costs. Additionally, they feature minimal fluctuation to their interest rates throughout the term of the loan, ensuring that seniors on fixed incomes are able to maximize their budgets.

Some Baby Boomers are finding success with creative rent-to-own financing options. In a housing market tipped in favor of buyers, it’s not difficult to find a seller hard-pressed to get rid of a property. Renting to own is mutually beneficial because it allows borrowers flexibility to negotiate financing terms while providing sellers the opportunity to fetch a higher price than they would on a short sale.

Linda Tavarez is a home credit consultant with HomeStarSearch, a pioneer in the rent to own home ownership search industry. She remarks that “we are seeing a momentun-gaining trend among a select group of seniors opting for lease to purchase arrangements. I don’t advocate it for all seniors, however a select group has found it beneficial to their circumstances.”

Rent-to-own financing hinges upon a contract to which the buyer and seller agree. During the lease period, which is generally three to five years, borrowers make payments that include the cost of the mortgage, plus partial down payments which go toward the home when the leasing period ends. This means borrowers don’t have to pay a lump sum down payment up front. The leasing period also acts as a credit rebuilding period since the borrower is generating equity with each monthly payment. A solid alternative to traditional financing for seniors, renting to own allows them to work out the details of the loan directly with the seller.

Seniors who have a positive relationship with a home seller may also benefit from owner financing. Similar to rent-to-own financing, the details of owner financing are worked out intimately between the borrower and the lender. Often, this can yield lower down payments and reduced interest rates for borrowers.

In an owner financing scenario, the home owner acts as the bank and receives monthly payments from the seller that include mortgage and interest. The property remains in the owner’s name, but the financial responsibility falls to the owner. Owner financing differs from renting to own in that there is no leasing period at whose end the borrower is obligated to purchase; therefore, it is in seniors’ best interests to ensure that the details of an owner financing arrangement imply eventual ownership for the borrower.

Not all seniors suffer from extreme credit problems. Though many may have less-than-stellar FICO scores, they may still be eligible for traditional bank loans. Borrowers who want the security of well-established bank funding should be prepared to pay large down payments, up to 30% of the housing cost. Additionally, interest rates will be elevated to match the credit risk the lender is taking. One way seniors can offset these costs is to reduce the amount financed. Selecting a more affordable home will require a lower down payment and less expensive monthly payments.

Despite the risk that Baby Boomers with subprime credit ratings present, there are still lending options available that will not exploit their financial situations. Of course, this requires careful research from those seniors in the market for a new home, but their generation’s proven track record of overcoming hardships and enduring change will be a testament to their eventual success.

JRD writes on a variety of personal finance and real estate topics. Holding a B.A. in Economics, JRD enjoys discussing societal ramifications of personal finance mainstays.

Can you save money on credit card debt payments?

Yes, it is possible to save money on credit card debt payments and any other types of debt payments, if you can work wisely on these. So, how is it possible to save money on credit card debt payments? Credit cards are the greatest form of debt, and so it is always better to avoid having too many credit cards. However, in order to save money on credit card payments, you can try balance transfer; which is considered as one of the best solutions to credit card debt problems.

Saving money on credit card payments

Saving money on credit card debt payments is not that tough, if you are high on affordability. That is, in case of balance transfer, you are required to transfer the balance from all of the credit cards you have, to a credit card with low interest rate. You can also take out a new credit card that is offering you 0% on balance transfer. So, when you transfer the balance, from all of the other credit cards to this one, you will not be required to make any interest payments till the offer period ends.
Now, this is one of the solutions to credit card debt which is quite easy to opt for if done in the right way. However, what exactly is the right way to take the whole advantage of this option? If you can take out a new credit card which offers you 0% on balance transfer, know that this is just a limited time offer. Thus, if you would like to save money, you will have to try and pay off the consolidated debt within the offer period.

So, rather than making only single payment each month, make relatively large payments and that too, more than one payment each month. This is going to help you with paying down the debt, fast enough. Even, in case of the option where you are transferring the balance from all of the credit cards into an already existing credit card with low interest rate, try to pay off the debt as fast as possible. Make more than one payment, every month. The greater the time you are going to take to pay off the debt, the greater will you be paying on the interest.

So, you can see that credit card balance transfer is one of the solutions to credit card debt, which not only helps you to pay down your debt, but also to save money on debt payments.

About the author – Grace is a financial writer and is associated with DebtCC Community (www.debtconsolidationcare.com). She provides Information on debt related issues and has also written many articles on topics related to finance. She also offers several easy solutions to individuals with financial problems.

What to do When Your Children Move Back Home

Retirement is a time that many parents look forward to. They get more available freedom, and the empty nest allows more time for the couple. When adult children are facing problems and move back home, parents often want to do anything to help them through the situation. While parents are able to help when children move back home, it is important to ensure that it will not result in financial problems that result in going back to work.

Set Ground Rules

When children first move back into the home, parents need to establish set rules and guidelines they must follow. This is particularly true when it comes to potential financial problems. For example, parents should set a rule that if the adult child uses the car, he or she must fill the tank with gas before coming home.

Setting up rules in the beginning will ensure that adult children are doing their part to get back on their feet and will not cause financial difficulties that make parents go back to work or put upcoming retirement plans on hold.

Never Lend Money

Parents who allow children to move back in for any reason must understand that it is never a good idea to lend money to their children. While it might seem that the child will use the money wisely, parents need to keep in mind that any money provided to children is not likely to end up returned.

Lending money is never a good idea, regardless of the individual the funds are helping. Children who are lent money will expect another loan in the future and will often get upset when the funds are not provided. Parents should inform children that they will not lend money.

Set Up an Allowance System

While it is not a good idea to allow the system to carry forward for long, parents who want to help children get back on their feet and provide enough cash to look for employment can establish a short-term allowance system. Parents should always take precautions to ensure that their children understand that the system is for the short-term only and need to set restrictions on the funds.

Giving a short-term allowance will not only prevent lending, it will ensure that children are taking measures to find employment. Adult children who move in while looking for a new home or a place to rent and have employment will not need an allowance. Only children who are looking for work will need the funds to get to job interviews.

When setting up the system, parents should have a firm end-date in mind. Giving an allowance for three or four months will usually give enough time to find employment, though the best amount of time will depend on the employment outlook in the location.

When children move back into their parent’s home, it is important for parents to ensure that they will not cause financial strife on a retirement plan. Parents set up retirement to meet their needs and usually do not plan for children to move back into the home. Fortunately, taking measures to help prevent financial problems by setting rules and discussing the problems with children will make it easier to avoid future problems. Retirement does not need to end simply because children move back home if parents are willing to set rules.

By-Line

Written on behalf of the team at www.therapistschools.com, who work diligently to help individuals seeking a long-term career in therapy find appropriate schooling. The forecasted growth in demand for therapists should help many find their way back to self-reliance.

Why You Should Not Buy Your Child a House

This is a guest post by Alex Summers.

Considering the state of the economy and the high number of twenty somethings struggling to find their professional place in the world, a large number of parents are opting to purchase their children homes. Instead of giving their kids a large inheritance years down the road, parents are choosing to pay a down payment or to buy a home for their kids to help them get off on the right foot during their young adulthood.

Continue reading

Credit Card Rewards For Retirement

This is a guest post by Mike, the founder of CreditCardForum.

When you think of credit card rewards, the first thing that pops in your head is probably “cash back” or “airline miles.” But those are only a couple of the different types. These days you can find rewards programs for almost anything, including ones to boost your retirement savings.

Continue reading

Elizabeth Rocks

Some posts just cry out to be written in and for me, this was one. The title, Elizabeth Rocks, came quickly to mind when I considered what I should write.


I realize that there are a number of Elizabeth’s I know that really are most impressive. As a Brit, Queen Elizabeth II is one of these fine ladies. She provides a unifying element in her various realms, and not least in Canada. She is almost universally liked, no small feat given her position.

Another impressive Elizabeth is Elizabeth Able, a co-moderator at Cre8asite Forums.   She has a number of intriguing online properties and QuoteSnack is perhaps the best-known of these.

The urge to write this post however did not come from an Elizabeth I know already. However a CNN article entitled, What’s so scary about Elizabeth Warren? was the trigger that encouraged me to be to put pen to paper, as you might say.

Elizabeth Warren doesn’t look or sound scary. She’s a 61-year-old Harvard Law School professor from Oklahoma who has written personal finance books, some with her daughter.

But conservatives and some bankers are trying to kill any chance that Warren – a consistent critic of the financial sector before it was cool to be one – will run the consumer financial protection agency that’s part of the Wall Street reform measure just signed into law by President Obama.

Here is what the article suggests she will be bringing to her new position:

Her ideas for a regulator for financial products became the template for the new agency, which is tasked with regulating mortgages and credit cards, as well as making new rules for much of the financial industry and enforcing them at the largest banks.

Before the financial crisis, she was already the authority on mounting credit card debt. And her books about the financial decline of the middle class have been must-reads in the consumer advocacy community for years.

Warren’s nomination would send a strong signal that the White House is willing to stand behind an aggressive regulator who will emphasize consumer needs over bank needs. White House spokesman Robert Gibbs called her “very confirmable” on Monday.

Like many I share the popular opinion that bankers in general can be somewhat arrogant and are certainly not very customer centric. They are already circling the wagons but hopefully Elizabeth Warren will be given the power to ensure US society gets a more customer-responsive banking system.

Best Banks



Having a bank is a necessity in modern-day living, but unfortunately many people are dissatisfied with the available choices.  At the start of this year Forbes listed America’s Best And Worst Banks, but it was somewhat surprising to see what they analyzed.

With Bank of America and Citigroup buoying their balance sheets and repaying billions of dollars in taxpayer bailout funds, the casual observer might assume the banking crisis is just about over. The casual observer would be wrong.  Lots of banks are going under these days. Here are the best and worst among the 100 largest.

Busted banks are still keeping the Federal Deposit Insurance Corp. busy. In the past two months, 41 went under, surpassing the total of 26 for all of 2008. What’s more, by some measures bank balance sheets are in worse shape today than they were at the height of the financial crisis.

It is of course necessary that your bank will still be there when you wish to get your money.  However that is a very minimal criterion in selecting a bank.

Unfortunately reports since then indicate that on other dimensions, banks are not doing very well. One title suggested that Customer Satisfaction With the Biggest Banks Plummets.

While customer satisfaction with banks over all remained unchanged in the fourth quarter of 2009 from the year-earlier period, customer satisfaction with some of the biggest banks has declined to the lowest fourth-quarter levels in years.  The results, from the American Consumer Satisfaction Index, back up similar findings from a Forrester Research report.  This found that customers of the biggest banks in the United States were the least likely to believe their financial institution did what was best for them as opposed to what was best for the institution’s bottom line.

A report from Reuters today shows that there is no improvement: Large bank customers  are even more dissatisfied.

Some of the largest U.S. banks were ranked very low for retail customer satisfaction.  A US marketing research company study by J.D. Power and Associates implies that as some of the biggest banks get bigger, customers may not be happy.  The three biggest U.S. retail banks — JPMorgan Chase & Co’s Chase, Citigroup’s Citibank, and Bank of America Corp’s Bank of America — consistently rank at or near the bottom for customer service in the regions they serve.

This dissatisfaction with banks and the service they provide seems to be the case wherever you look.  Here are some results from the UK on how different services rank for customer satisfaction.

According to a recent survey conducted by moneysupermarket.com, it is hairdressers and hotels that that we think provide the best service. While banks and estate agents are thought to offer the worst.  Restaurants, coffee shops, garden centres, supermarkets, clothes stores and entertainment centres such as the cinema and bowling alleys all scored highly with consumers.

Here below are the results for this year.  Compared to last year’s survey it would appear that the service provided by banks has actually got worse. Banks have dropped a place in this table.

banks customer service

The industries at the bottom of the table have all traditionally suffered a bad press. Most of them – banks, energy companies, estate agents – demand hefty fees of their customers and provide necessary and essential  services, rather than luxuries.

Unfortunately the attitude in many banks may be as Tom Peters said, that “we are no worse than the others”.  If you are looking for one of the best banks, hopefully you can find one that searches for banking excellence, which includes not only safeguarding your money but also delivering a high level of customer satisfaction.

Reblog this post [with Zemanta]